The global energy transition continues to drive EV demand, which in turn fuels battery-grade nickel demand. AME is forecasting EV sales to be 10.5m in 2022, which will increase to 14.9m in 2024. The EV market share will also increase from 13% in 2022 to 17% in 2024.
Nickel
containing batteries, including the NCA and NCM chemistries, are expected to
account for 69% of total battery production, with LFPs accounting for the
remaining 31%. Assuming each battery contains ~40kg of nickel will bring total
battery-grade nickel demand to approximately 290ktpa in 2022.

Meeting this demand is
challenging, as the traditional method of nickel sulphate production always
relied on sulphide ores, due to a simpler processing route. The extracted ore
undergoes beneficiation to form a concentrate that is then smelted and refined
to class 1 products (with over 99.8% nickel content).
However, this ore type
only accounts for one quarter of global nickel reserve. As major sulphide
operations deplete, battery producers will need to shift their attention
towards the abundant but historically neglected laterite ore.
Lateritic deposits occur
near-surface in tropical climates and are formed with the weathering of
ultramafic rocks. The lower grade and higher moisture content of the ore make
it suitable for the production of nickel pig iron (NPI) and ferronickel with
blast furnace (BF) and rotary kiln-electric furnace (RKEF) technologies.
Mounting
demand for higher grade nickel is drawing increasing attention to an
alternative metallurgical process capable of treating laterite ores – the high-pressure
acid leach (HPAL) process. Two types of intermediates can be produced. Including
mixed sulphide precipitate (MSP), which is processed into matte, or mixed
hydroxide precipitate (MHP), which is further refined to sulphates.
Existing Operations
There are currently 12
producing HPAL projects worldwide. MSP is produced at Murrin Murrin, Coral Bay,
Taganito and Ambatovy. Murrin Murrin and Ambatovy further refine their
intermediates to class 1 briquettes and powders.
While MHP is produced at Moa
Bay, Goro, Ravensthorpe, Ramu, Gordes, Halmahera, Huayue and QMB. Prony
Resources and Tsingshan have announced plans to extend their production line
downstream to process the MHP into nickel sulphate themselves, instead of
selling the intermediate to third parties.

The Process
The laterite slurry is fed
into an autoclave and leached with sulphuric acid at 250°C and 5,000kPa. The
acid is pre-neutralised with limestone before being separated from the leach
residue with counter-current decantation, producing a nickel cobalt containing
pregnant solution. This solution is further neutralised with limestone.
The
process then diverges depending on whether it produces MSP or MHP. MSP is
produced with the addition of hydrogen sulphide in a pyrometallurgical process.
While MHP is produced with the addition of magnesium oxide or sodium hydroxide
in a hydrometallurgical process.
HPALs offer distinct
advantages, predominantly its ability to process low grade ore feeds. They also
have a high recovery of by-products including cobalt, chromite and even
ammonium sulphates, further boosting revenue. The MHP produced is also cheaper
to source and fluctuates less than class 1 nickel.
However, implementation of
these operations has caused an assortment of problems. Their high initial capital
expense is a major barrier to entry. The recently commissioned QMB is reported
to have a construction cost of US$700m. They also require high operating costs
due to the high pressure, temperature and acidic conditions required in the
autoclave.
Ore grade variations have
also delayed many HPAL operations, such as Murrin Murrin and Goro, from
reaching their nameplate capacity. The Ambatovy plant in Madagascar has yet to
reach its nameplate capacity of 60ktpa and is now assumed to be only able to
reach 50ktpa of contained nickel production. Additionally, HPALs are limited to
only process low magnesium limonite ores, leaving the higher magnesium saprolite
unsuitable as feed.
However, Metallurgical
Corporation of China (MCC)’s majority owned Ramu operation in Papua New Guinea
has finally solved the issue of slow ramp ups. The technology was perfected and
replicated in new Indonesian projects. This has induced a series of rapid HPAL
development, as new projects are capable of reaching capacity within two to
three years.
Project Pipeline
New development is
concentrated in Indonesia to capitalise on its rich reserve of laterite ores. Vale’s
Pomalaa project is a 120ktpa nickel in MHP HPAL collaboration with Huayou
Cobalt, after Sumitomo’s unexpected withdrawal.
The companies have agreed that
coal-fired plants will not be used to power the operation. Ford Motor will have
the right to acquire up to 84ktpa of nickel for its EV battery production when
the project comes online in 2025.
Eramet and BASF will also be
developing an integrated smelter and refinery complex in Weda Bay. This
includes a 42ktpa MHP HPAL and a base metal refinery that will produce nickel
and cobalt precursor cathode active materials (pCAMs).
Outside of Indonesia,
Horizonte’s Vermelho project in Brazil has the highest chance of commissioning,
with a Feasibility Study underway. Other projects in Australia are also being
slowly advanced, although they are still in the exploration stage.

Don’t Forget Carbon
The energy intensive nature
of the HPAL process also raises the carbon intensity of nickel produced, which
contradicts the purpose of an EV if it is used in the battery. Production of
one tonne of class 1 nickel from sulphides emit approximately 10tCO2, while producing
from HPALs emits 19tCO2. This makes HPAL produced nickel less attractive to
manufacturers in ESG centric regions such as the EU and North America.